April 2005 Special Distribution
The Fund's Declaration of Trust requires that it distribute all taxable income earned in its fiscal period ending December 31. It may be necessary for the Fund to estimate a special year-end distribution to achieve this requirement. The initial distribution, if any, will be made in December and paid to unitholders of record on December 31. Upon completion of the annual financial statements, a final determination of any additional distribution will be made, and the additional amount, if any, will be paid to unitholders of record at that time. If the Fund is required to make an additional distribution, the unitholders of record on December 31 will be required to include the amount of the additional distribution in their taxable income. If they are not unitholders at the record date of the additional payment they will be required to include the amount in their taxable income even though they do not receive the distribution.
We have received a number of questions about the special distribution to be made in April 2005 in respect of 2004 taxable income. It is a legal requirement that this amount be included on the 2004 T3 slips . To the extent that unitholders have sold their units in the intervening period (between Dec 31 and Mar 31), there is a mismatch between who receives the special distribution and who gets taxed on it. We recognize this problem but were not permitted to make the distribution with a December 31, 2004 record date. The overall impact is that unitholders who sold their units after December 31, 2004 will be taxed on a distribution that they will not receive. Those unitholders, however, can reduce their capital gain on the sale by the amount of the $0.068 distribution.